- Quarterly Report (10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

o QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008

o TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO __________

COMMISSION FILE NUMBER: 333-119034

China Holdings, Inc.

(Name of Small Business Issuer in Its Charter)

Nevada	98-0432681
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer identification No.)

Julianna Lu, BSc. MSc.

Chief Executive Officer

101 Convention Center Drive, Suite 700, Las Vegas, NV 89109-2001

(Address of principal executive offices) (Zip Code)

Issuer’s telephone Number: 86-10-6586-4790

Mailing Address

8E-C2, Global Trade Mansion, No.9A, GuangHua Rod,

Chaovan District, Beijing PR China 100020

Issuer’s telephone Number: 86-10-6586-4770 and Facsimile : 86-10-6586-4790

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes o No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of November 10th , 2008, the issuer had a total of 186,600,000 outstanding shares of Common Stock , and 1,250,000 shares of Series “A” Preferred Stock, and 77,173,669 outstanding and issued of Common Stock Option, and 69,900,000 outstanding and issued of Common Stock Warrants.

Transitional Small Business Disclosure Format (check one): Yes o No x

CHINA HOLDINGS, INC.

INDEX TO FORM 10-Q FILING

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATIONPAGE


		Page Numbers
P PART I - FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements
	Condensed Balance Sheets	F-1
	Condensed Statements of Operations	F-2
	Condensed Statements of Cash Flows	F-3
	Notes to Condensed Financial Statements	F-4 to F-7
Item 2.	Management Discussion & Analysis of Financial Condition and Results of Operations	2
Item 3.	Controls and Procedures	32

P PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	32
Item 1A	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Submission of Matters to a Vote of Security Holders	33
Item 5	Other information	33
Item 6.	Exhibits	33

CERTIFICATIONS

	Exhibit 31 - Management certification
	Exhibit 32 - Sarbanes-Oxley Act

CHINA HOLDINGS, INC.

INDEX TO FINANCIAL STATEMENTS

	Page

Consolidated Balance Sheets as of September 30, 2008 (unaudited) and December 31, 2007 (audited)		F-1

Consolidated Statements of Operations for the three and six months ended September 30, 2008 and 2007 (unaudited)
and the period from April 3, 2002 (inception of the development stage) to September 30, 2008 (unaudited)		F-2

Consolidated Statements of Cash Flows for the six months ended September 30, 2008 and 2007 (unaudited)
and the period from April 3, 2002 (inception of the development stage) to September 30, 2008 (unaudited)		F-3

Notes to Consolidated Financial Statements		F-4 to F-7

CHINA HOLDINGS INC.

(a development stage company)

CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2008			2007

	(unaudited)			(audited)
ASSETS

CURRENT ASSETS
Cash	$	1,525		$	9,958
Prepaid expenses and other current assets		26,542			6,723
Total current assets		28,067			16,681

Property and equipment, net		9,007			11,622
Intangible assets		3			3

TOTAL ASSETS	$	37,077		$	28,306


LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES

Accounts payable and accrued liabilities	$	54,973		$	72,110
Due to shareholders		1,905,773			1,271,932
Total current liabilities		1,960,746			1,344,042

Commitments and Contingencies

Stockholders' Deficit:
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,250,000 shares issued and outstanding at June 30, 2008 and December 31, 2007
		1,250			1,250
Common stock, $0.001 par value, 2,000,000,000 shares authorized 185,882,060 and 180,607,060 shares issued and outstanding at June 30, 2008 and December 31, 2007
		186,600			180,607
Additional paid-in capital		16,804,348			15,363,037
Deficit accumulated during the development stage		(18,852,686	)		(16,797,449	)
Accumulated other comprehensive loss		(63,181	)		(63,181	)
Total Stockholders’ Deficit		(1,923,670	)		(1,315,736	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	37,077		$	28,306

See Notes to Consolidated Financial Statements.

F-1

CHINA HOLDINGS INC.

(a development stage company)

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended September 30 2008			Three Months Ended September 30 2007			Nine Months Ended September 30 2008			Nine Months Ended September 30 2007			Cumulative results of operations from April 3, 2002 (Inception) to September 30, 2008
	unaudited			audited			unaudited			audited			unaudited

Sales	$	-		$	-		$	-		$	-		$	8,976
Cost of goods sold		-			-			-			-			245

Gross profit		-			-			-			-			8,731

Expenses:
Advertising and promotion		2,258			13,190			21,519			31,830			188,850
Amortization of intangible assets		-			-			-			3			7,125
Consulting fees		17,380			283,503			59,732			1,369,179			4,213,032
Stock issued for failed acquisition		-			-			-			-			1,415,000
Depreciation		872			1,739			2,615			3,986			15,231
Interest and bank charges		45,581			26,442			122,023			374,702			412,422
Investor relations		3,390			31,426			176,488			(164,977	)		470,161
Management fees		120,000			267,735			383,079			567,120			3,747,711
Office		1,849			2,845			8,375			13,290			109,324
Professional fees		5,380			35,592			42,509			120,316			1,088,373
Rent		4,758			6,051			15,404			24,092			118,610
Research and development		-			-			-			-			1,743,593
Stock based compensation		398,132			245,360			1,215,729			2,223,616			5,193,051
Travel		72			2,667			4,721			11,518			57,433
Vehicle		-			-			-			5,257			31,049
Total expenses		599,672			916,550			2,052,196			4,579,929			18,810,967

Net loss from operations		(599,672	)		(916,550	)		(2,052,196	)		(4,579,929	)		(18,802,236	)

Other income (expenses)
Foreign exchange gain or loss		-			-			(3,041	)		5,829			36,000
Impairment loss-licensing rights		-			-			-			-			(182,874	)
Debt forgiveness income		-			-			-			16,728			96,423
Total other income (expenses)		-			-			(3,041	)		22,557			(50,451	)

Net loss	$	(599,672	)	$	(916,550	)	$	(2,055,237	)	$	(4,557,372	)	$	(18,852,686	)

Basic net loss per share	$	(0.00	)	$	(0.01	)	$	(0.01	)		(0.04	)

Weighted average number of common
basic and diluted shares outstanding		181,768,832			128,799,033			181,768,832			128,799,033

The components of other comprehensive loss
Net loss	$	(599,672	)	$	(916,550	)	$	(2,055,237	)		(4,557,372	)
Foreign currency translation adjustment		-			-			-			(3,262	)

Comprehensive loss	$	(599,672	)	$	(916,550	)	$	(2,055,237	)		(4,560,634	)

See Notes to Consolidated Financial Statements.

F-2

CHINA HOLDINGS INC.

(a development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30 2008			Nine Months Ended September 30 2007			Cumulative results of operations from April 3, 2002 (Inception) to September 30, 2008
	unaudited			audited			unaudited

OPERATING ACTIVITIES
Net loss	$	(2,055,237	)	$	(4,557,372	)	$	(18,852,686	)
Adjustments to reconcile net loss to cash used		-			-			-
in operating activities:		-			-			-
Accrued interest		-			79,218			181,570
Amortization of intangible assets		-			-			7,125
Amortization of deferred compensation		-			29,482			153,942
Stock options expense		1,268,263			-			2,169,053
Depreciation		2,615			3,986			15,231
Impairment loss-licensing rights		-			-			182,874
License rights		-			-			1,359,999
(Gain) loss on settlement of debt and issuance of shares		-			(16,728	)		(104,924	)
Issuance of shares to settle debt and cover financing		-			-			-
Non cash expenses paid with shares		179,041			1,325,580			3,382,631
Non cash interest paid with shares		-			-			326,360
Stock-based compensation		-			462,695			3,319,191
Warrant issued for Compensation		-			2,066,279			3,639,142
Stock issued for failed acquisition		-			-			1,415,000
Changes in operating assets and liabilities		-			-			-
Prepaid expenses and other current assets		(19,820	)		88,874			124,591
Accounts payable and accrued liabilities		(17,137	)		(938	)		63,353
Net cash used in operating activities		(642,274	)		(518,924	)		(2,617,549	)

INVESTING ACTIVITIES
Purchase of equipment		-			-			(4,701	)
Purchase deposit for acquisition of companies		-			-			(19,536	)
Net cash used in investing activities		-			-			(24,237	)

FINANCING ACTIVITIES
Proceeds from issuance of common stock		-			-			50,000
Net advances from shareholders		633,842			527,023			2,656,491
Net cash provided by financing activities		633,842			527,023			2,706,491

EFFECT OF EXCHANGE RATE CHANGES		-			(3,262	)		(63,180	)

NET (DECREASE) INCREASE IN CASH		(8,433	)		4,837			1,525

CASH, BEGINNING OF PERIOD		9,958			-			-

CASH, END OF PERIOD	$	1,525		$	4,837		$	1,525

Supplemental disclosures of cash flows information:
Interest paid	$	-		$	-
Taxes paid	$	-		$	-

Non-cash financing activities:
Settlement of debt in common stock	$	-		$	-
	$	-		$	-

See Notes to Consolidated Financial Statements.

F-3

CHINA HOLDINGS INC.

(a development stage company)

NOTES TO CONSOLIDATED AUDITED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008

1.	NATURE OF OPERATIONS

China Holdings Inc. (the "Company") was incorporated in the state of Nevada in the United States of America on April 3, 2002 as AE&E Pharma Corporation. The Company changed its name on May 25, 2004, to China Health Holding, Inc. On May 1, 2007, the Company changed its name to China Holdings, Inc. The Company's common stock trades on the US over-the-counter bulletin board under the symbol "CHHL". On April 18, 2005, our common stock was approved for quotation on the OTC Bulletin Board under the symbol "CHHH." The Company's web site is www.chinaholding.net .

The Company has three wholly-owned subsidiaries: (i) China Power, Inc., (ii) China Minerals Holdings, Inc., and (iii) China Health Holdings, Inc.

On May 1, 2007, the Company’s wholly owned subsidiary, China Health World Pharmaceutical Corporation, amended its Articles of Incorporation to change its name to China Health Holdings, Inc.

On May 9, 2007, the Company’s wholly owned subsidiary China Health World Trade Corporation amended its Articles of Incorporation to change its name to China Power, Inc. On January 7 ^th , 2008, the Company incorporated its third subsidiary as China Minerals Holdings, Inc., a Nevada corporation.

The Company’s initial business plan was to engage in the manufacturing, marketing and distribution of proprietary natural medicinal products. The Company has since revised its business plan to not only focus on becoming a manufacturing, marketer and distributor of natural medicinal products, and to focus on becoming a diversified global assets holding company. The Company has had nominal revenues since its inception.

The Company and its subsidiaries intend to engage in multiple China-focused business activities including, energy, renewable energy, resources, utilities finance, real estate, and pharmaceutical ventures. Their objective is to achieve long-term capital appreciation through investment in companies and other entities with significant assets, investments, production activities, trading or other business interests in China or worldwide.

CONTROL BY PRINCIPAL STOCKHOLDERS

The Chairman /Founder/Chief Executive Officer owns beneficially and in the aggregate, the majority of the voting power of the outstanding shares of the common stock of the Company. Accordingly, the chief executive officer, has the ability to control the approval of most corporate actions, including increasing the authorized capital stock of the Company and the dissolution, merger or sale of the Company's assets or business.

F-4

Basis of presentation

These condensed interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

The interim results of operations are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2008. The Company’s financial statements contained herein are unaudited and, in the opinion of management, contain all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of financial position, results of operations and cash flows for the periods presented. The Company’s accounting policies and certain other disclosures are set forth in the notes to the consolidated annual financial statements contained in the Company’s Annual Report on Form 10-KSB and 10KSB/A for the year ending December 31, 2007 filed on April 18, 2008. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a working capital deficiency of $1,932,679n accumulated deficit of $18,852,686 and a stockholders’ deficit of $1,923,670 as September 30, 2008 and has incurred significant losses since inception. Further losses are anticipated in the development of its intended business plan. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, the business and future success may be adversely affected. Given the Company's limited operating history, lack of sales, and its operating losses, there can be no assurance that it will be able to achieve or maintain profitability. Accordingly, these factors raise substantial doubt about the Company’s ability to continue as a going concern.

China Holdings is a development stage company as described by Statements of the Financial Accounting Standards Board No. 7 (“SFAS 7.”) SFAS 7 states that a business is considered to be in the development stage if it is devoting substantially all of its efforts to establishing a new business and either of the following conditions exists:

1.	Planned principal operations have not commenced.
2.	Planned operations have commenced, but there has been no significant revenue therefrom.

The Company’s management believes the Company is a development stage entity as it is in the process of attempting to acquire assets, namely that of potential both identified and currently unidentified merger candidates, and is also exploring various forms of financing and capital structures in order to facilitate future acquisitions. The Company has considered SFAS 7 and has determined April 3, 2002, the inception date, to be the inception date of the development stage.

The Company will depend almost exclusively on outside capital to complete the development of its intellectual property, completion of its proposed projects and marketing of its products. Such outside capital will include advances from the majority shareholder, proceeds from the sale of the company's common stock or preferred stock and may include borrowing from banks. There can be no assurance that capital will be available as necessary to meet these development costs or, if the capital is available, that it will be on terms acceptable to the Company.

The issuances of additional equity securities by the Company may result in a significant dilution in the equity interests of its current stockholders. Obtaining bank loans, assuming those loans would be available, will increase the Company's liabilities and future cash commitments.

Consolidation

The condensed consolidated financial statements include the accounts of the Company and its three (3) wholly-owned subsidiaries, China Power, Inc., China Minerals Holdings, Inc. and China Health Holdings, Inc. Those subsidiaries have not yet commenced operations and have no significant assets, liabilities, revenues or expenses. All intercompany accounts have been eliminated in consolidation.

F-5

Reclassifications

Certain reclassifications to the Company’s balance sheet and income statement have been made in 2007, in order for the 2008 financial statements to conform to the presentation of these financial statements. These reclassifications did not impact the Company’s total assets, total liabilities, net loss or stockholders deficit for the six months ended June 30, 2008 and 2007, respectively.

2.	INTANGIBLE ASSETS

a)	Asset purchase agreement

Pursuant to an asset purchase agreement dated May 1, 2004, the Company acquired from the Company’s President, who is a majority shareholder, proprietary rights and formulas to the 26 natural herbal medicinal products that comprise the King of Herbs and Taoist Medicine product lines. The Company recorded the cost of the proprietary rights and formulas as intangible assets at the historical cost basis of $1. The excess of the purchase price over the historical cost basis of the intangible assets of $366,306 was expensed as research and development costs during the year ended December 31, 2004.

b)	Licensing rights agreement

During the fiscal year 2004, the Company entered into various agreements with Hotway Nutraceuticals Canada Co., Ltd. (“Hotway”), a British Columbia company. The intangible assets acquired from Hotway were written down to $1 during 2004.

Asset purchase agreement

Pursuant to an asset purchase agreement dated March 22, 2005, the Company acquired from the Company’s shareholders intellectual property rights to 108 “100% Natural Taoist Herbal Medicinal Products”. The Company has recorded the cost basis of these property rights at the historical cost basis of the shareholders of $1. The excess of the purchase price over the carrying value of the intangible assets totaling $1,359,999 was expensed as research and development costs during 2005.

3.	PROPERTY AND EQUIPMENT

	September 30,			December 31,
	2008			2007
Computer Equipment	$	20,846		$	20,846
Furniture & Fixtures		3,392			3,392
Less: accumulated depreciation		(15,231	)		(12,616
	$	9,007		$	11,622

Depreciation expense amounted to $872 and $2,615 and $1,739 and $3,986 for the three and nine months ended September 30, 2008 and 2007, respectively.

4.	DUE TO SHAREHOLDERS

The Company has received advances from two shareholders which bear interest at 10% per annum with no specific repayment terms. The tables below detail transactions during the nine months ended September 30, 2008.

The table below details transactions related to the loan payable to the Company's Chairman /Founter/Chief Executive Officer during the nine months ended September 30, 2008 :

Beginning balance payable, December 31, 2007	$	974,448
Accrued management fees		270,000
Accrued interest		94,790
Advances from Chief Executive Officer		152,371
Ending balance payable, September 30, 2008	$	1,491,609

The table below details transactions related to the loan payable to the Company's Vice Chairman/Director during the nine months ended September 30, 2008:

Beginning balance payable, December 31, 2007	$	297,484
Accrued management fees		90,000
Accrued interest		26,680
Advances from Vice Chairman		-
Ending balance payable, September 30, 2008	$	414,164

F-6

6.	CAPITAL STOCK

The authorized capital of the Company consists of 2,000,000,000 voting common shares with a $0.001 par value and 20,000,000 preferred shares with a $0.001 par value. On March 28, 2005, the Company increased the authorized common shares from 55,000,000 shares to 300,000,000 shares. On February 22, 2008, the Company increased the authorized common shares from 300,000,000 shares to 2,000,000,000 shares.

On February 21, 2006, the Company filed a Certificate of Designation, Powers Preferences and Rights of Series A preferred stock which authorized the Company to issue up to 1,000,000 shares of Series A preferred stock with a par value of $0.001 per share. The Series A preferred stock has a stated value of $0.15 per share and a liquidation preference over the Company’s common stock. Holders of Series A preferred stock are entitled to two votes for each share of Series A preferred stock owned. Each share of Series A preferred stock is convertible, at the option of the holder, into two shares of common stock, commencing two years after the date of issuance, provided the market price of the common stock is not below $1.00 per share. Additionally, if prior to two years from the date of issue, there is a sale or other disposition of all or substantially all of the Company’s assets, a transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of, or upon a consolidation, merger or other business combination where the Company is not the survivor, then immediately prior to such event each holder of Series A preferred stock may convert any or all of such holder's shares of Series A preferred stock into common stock. On September 16, 2006 the Company approved an increase in the number of authorized Series A Preferred stock to 2,500,000.

As of September 30, 2008 , the Company had a total of 186,600,000 outstanding shares of Common Stock , and 1,250,000 shares of Series “A” Preferred Stock, and 77,173,669 outstanding and issued of Common Stock Option, and 69,900,000 outstanding and issued of Common Stock Warrants.

Quarter Ended September 30, 2008

·	During the quarter during the year ended September 30, 2008, the Company issued 717,940 shares of common stock for the company’s office rent rendered at an aggregate market value of $0.0112 per share for a total value of $8,041.

7.	STOCK OPTIONS AND STOCK WARRANTS

The Company did not grant any warrants during the six months ended September 30, 2008.

Options: During the three months ended September 30, 2008: the Company granted stock options to various consultants and management, to purchase an aggregate of 36,322,247 shares of the Company’s common stock at an weighted average exercise price of $0.03 rendered. These stock options were valued at aggregate of $$398,132 using a Black-Scholes model with the following weighted average assumptions: dividend yield of 0 %; expected volatility of 284 %; risk-free interest rate of 4.85 %; an expected life of 8 years; stock trading price of $0.0112 on the date of grant. All of these stock options were vested immediately upon grant, and accordingly were expensed immediately for a total expense of $398,132.

The following table summarizes all stock warrants and stock options granted, exercised and expired in the nine months ended September 30, 2008:

	Stock Warrants					Stock Options
	Shares underlying warrants			Weighted average Exercise Price		Shares underlying Options			Weighted average Exercise Price

Outstanding as of December 31, 2007		74,650,000		$	0.19		10,351,422		$	0.16

Granted							70,322,247			0.06

Exercised							-			-

Expired or cancelled		(4,750,000	)	$	0.17		(3,500,000	)	$	0.05

Outstanding as of September 30, 2008		69,900,000		$	0.19		77,173,669		$	0.07

8.	RELATED PARTY TRANSACTIONS

The Company has entered into the following related party transactions for the six months ended as September 30, 2008.

Recorded management fees for the Chief Executive Officer and Chairman for the three months ended September 30, 2008 and 2007 of $120,000 and $81,000 respectively.

Julianna Lu/The Chairman/Founder/Chief Executive Officer, routinely advanced funds which totaled $152,371 during the six months ended September 30, 2008. These advances are unsecured and repayment terms are unscheduled. The Company accrues interest at 10% per annum on the advances.

9.	COMMITMENTS AND EMPLOYMENT AGREEMENTS/CONSULTANTS

Pursuant to various management and consulting contracts the Company has committed to pay (i) a monthly management fee of $30,000 to the Chairman/Chief Executive Officer/ Chief Financial Officer/ Chief Operation Officer on January 1, 2008 (ii) a monthly management fee of $10,000 to the Vice Chairman/President. The management fees have not been paid by the Company and are included in shareholder loans on the balance sheet. Payment terms are unscheduled.

10.

ACQUISITIONS

As of December 31, 2007 and through September 30, 2008, the Company has considered and negotiated numerous acquisition agreements, and business cooperation agreements, with many business entities and governmental entities in the People's Republic of China. As of December 31, 2007 and through September 30, 2008, the Company has not completed and finalized any of these acquisition and business cooperation agreements. The management of the Company believes that they do not have any liability with regards to these acquisition and business cooperation agreements unless they are completed and finalized. In addition, to the extent that the acquisition and business cooperation agreements require cash for them to be consummated, or commenced upon, the Company may not have adequate cash and/or financing resources, and the Company may not have the ability to obtain adequate cash and/or financing resources.

F-7

Forward Looking Statement -

This quarterly report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "our company believes," "management believes" and similar language. These forward-looking statements are based on our current expectations and are subject to certain risks, uncertainties and assumptions, including those set forth under the heading "Risk Factors". Our actual results may differ materially from results anticipated in these forward-looking statements. We base our forward-looking statements on information currently available to us, and we assume no obligation to update them. In addition, our historical financial performance is not necessarily indicative of the results that may be expected in the future and we believe that such comparisons cannot be relied upon as indicators of future performance.

To the extent that statements in the quarterly report are not strictly historical, including statements as to revenue projections, business strategy, outlook, objectives, future milestones, plans, intentions, goals, future financial conditions, future collaboration agreements, the success of the Company's development, events conditioned on stockholder or other approval, or otherwise as to future events, such statements are forward-looking, All forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this annual report are subject to certain risks and uncertainties that could cause actual results to differ materially from the statements made. Other important factors that could cause actual results to differ materially include the following: business conditions and the amount of growth in the Company's industry and general economy; competitive factors; ability to attract and retain personnel; the price of the Company's stock; and the risk factors set forth from time to time in the Company's SEC reports, including but not limited to its annual report on Form 10-KSB; its quarterly reports on Forms 10-Q; and any reports on Form 8-K. In addition, the Company disclaims any obligation to update or correct any forward-looking statements in all the Company’s annual reports and SEC filings to reflect events or circumstances after the date hereof.

As used in this Annual Report, unless otherwise indicated, the terms “we,” “us,” “our” and “the Company” refer to China Holdings, Inc. and its subsidiaries.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Background

We are a development stage company, founded by our Chairman/Founder and Chief Executive Officer, Julianna Lu, in 2002 with the goal of becoming a leading manufacturer, marketer and distributor in the global natural medical and pharmaceutical industry. On April 3, 2002, we were incorporated under the laws of the State of Nevada under the name A E&E Pharma Corporation and changed our name on May 25, 2004, to China Health Holding, Inc. On May 1, 2007, we changed our name to China Holdings, Inc. Effective May 11, 2007, our stock has traded under the symbol CHHL on the OTC Bulletin Board. The Company maintains a website at www.chinaholding.net . However, information found on the Company’s website is not incorporated by reference into this report. We have had nominal revenues since our inception.

We have three wholly-owned subsidiaries: (i) China Power, Inc. (ii)China Minerals Holdings Inc. and (iii) China Health Holdings, Inc.

On May 1, 2007, our wholly owned subsidiary, China Health World Pharmaceutical Corporation, amended its Articles of Incorporation to change its name to China Health Holdings, Inc.

On May 9, 2007, our wholly owned subsidiary China Health World Trade Corporation amended its Articles of Incorporation to change its name to China Power, Inc. On January 7, 2008, the Company incorporated its 3rd subsidiary, China Minerals Holdings, Inc. under Nevada State Laws.

Our initial business plan was to engage in the manufacturing, marketing and distribution of proprietary natural medicinal products. We have since revised our business plan to not only focus on the manufacture, marketing and distribution of natural medicinal products but to also focus on becoming a diversified global assets holding company. We and our subsidiaries intend to engage in multiple China-focused business activities including, energy, renewable energy resources, finance, real estate, utilities and pharmaceutical. Our objective is to achieve long-term capital appreciation through investment in companies and other entities with significant assets, investments, production activities, trading or other business interests in China, and/or worldwide, and/or which derive a significant part of their revenue from China, and/or worldwide.

Subsidiary Operations Plans

China Power, Inc.

China Power, Inc. intends to capture China's growing energy, renewable energy, and environment protection projects domestically and worldwide. China Power intends to engage in business activities and investments in hydropower plants, biomass energy projects and companies in China and throughout the world primarily through mergers and acquisitions, joint-venture partnerships with hydro-power plants, biomass energy projects and companies in China and throughout the world. China Power’s advanced hydro-power renewable energy strategy and plan is expected to improve the technical, societal, and environmental benefits of hydropower, biomass energy and to exploit investment and business opportunities in the cost-competitive hydropower and biomass energy industries in China and throughout the world, with a focus towards building long-term shareholder value. China Power intends to seek financing to fund its hydropower and biomass energy projects. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. There can be no assurance that we will be successful in obtaining financing.

China Minerals Holdings, Inc.

China Minerals Holdings, Inc. is a exploration stage company, aiming to establish, expand, and diversify its presence in the mining resource industry in China and throughout the world. China Minerals Holdings intends to focus on precious and rare metals resources, properties with mining licenses in production and joint venture opportunities. Furthermore, China Mineral Holdings’ mining projects and prospects will be based on rigorous economic evaluation, independent advancement and joint-ventures.

China Health Holdings, Inc.

China Health Holdings, Inc. is a development stage company with the goal of becoming a leading developer, manufacturer, marketer and distributor of pharmaceutical drugs and dietary supplements in China and throughout the world. Its main objective is to partner with CHINA -SFDA approved drug producers, GMP certified manufacturing facilities, research and development centers and universities in China. China Health’s goals include mergers and acquisitions with leading pharmaceutical companies in China. China Health’s strategy is to leverage synergies, integrate drug pipelines and distribution channels, and management expertise between pending pharmaceutical acquisitions. China Health intends to develop a Taoist Medicine product line and a Vitamins and Supplements product line. All of the products for these product lines are fully developed and China Health expects to launch the Taoist Medicine and Vitamins and Supplements product lines. All of China Health’s manufacturing will be outsourced to third parties. China Health plans to generate revenues by sales of its herbal supplement products (1) through a website that is currently under construction, (2) through retail and wholesale distributors, and (3) through the establishment of retail stores in major cities in North America. While in the past China Health’s current operations and sales were in Canada, China Health anticipates expanding its sales into the U.S. over the next six to twelve months and, thereafter, into regions of Europe and Asia.

RECENT DEVELOPMENTS

The Company, via its wholly owned subsidiary China Power, has entered a total of five (5) development, investment and construction agreements with the local China Government in Hebei, Hunan, AnHui and Inner Mongolia Provinces, PR China to develop, invest and construct a total of five (5) biomass energy power generation plants/projects with a total potential power capacity for 50MW x 5 = 250 MW in pipeline. The development and construction of the facilities will require approximately $78,000,000 for each 50MW biomass plant/project. The development and construction of the facilities are subject to the Company completing certain due diligence requirements and obtaining financing from third parties. In addition to the foregoing, according to the China Central Government’s current alternative energy laws related to Biomass Energy Projects, under the All Construction Agreements, guaranteed (i) the financing for up to 65% of the 580 million Yuan China Power has committed to the development of all the power plants through local banks at a preferred interest rate, (ii) that 100% of the power generated by the Biomass Energy plants shall be purchased by the China State Grid at a purchase price of between 0.60 and 0.65 Yuan, or approximately $0.09 and $0.08, per kilowatt, (iii) All Biomass Energy Power Generation Plant/project (50MW) has designated with a total potential of 400 million KW/hr power generation capacity approximately annually, (iv) China Power’s rights under the Construction Agreements are all exclusive. The construction of the plant is estimated to take approximately two to three years.

THE INNER MONGOLIA 2 ^ND ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS ( 298.8 - 996 Mega Watts)

On September 16, 2008, China Power, Inc., China Holdings, Inc.’s controlled subsidiary (“ China Power ”), entered into a 2 ^nd agreement of a Four (4) Years Development and Construction Agreement (the “ Construction Agreement ”) with Ontniute Government (“Ontniute”), Inner Mongolia, People’s Republic of China, pursuant to which China Power was granted the exclusive right to develop and construct THE INNER MONGOLIA 2 ^nd ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS with power capacity of 298.8 megawatt ( 6 x 49.8 megawatt), and a potential up to 996 megawatt ( 20 x 49.8 MW) wind energy power capacity . Specifically, under the Construction Agreement, Ontniute has agreed to provide China Power with :1). Exclusive and First Refusal Rights with non-competition and non-solicit terms, 2). The land rights for up to a 2 ^nd of 200 square KM (Kilo meters) of land in a 2 ^nd defined areas , to develop THE INNER MONGOLIA 2 ^nd ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS with power capacity of 298.8 megawatt ( 6 x 49.8 megawatt), and a potential up to 996 megawatt ( 20 x 49.8MW) wind energy power capacity . Conversely, China Power has committed to invest up to 2700 million Yuan ( with 35% in cash equity investment and 65% bank loans) towards the development and construction of the power plants.

In addition to the foregoing, according to the China Central Government’s currently alternative energy laws related to Wind Energy Projects, under the Construction Agreement, Chinese Government has guaranteed (i) the financing for up to 65% of the total 2700 million Yuan through a local bank at a preferred interest rate to China Power committed to the development of the power plants, ii) that 100% of the electricity power generated by the Wind Energy plants shall be purchased by the China State Grid at a purchase price of between 0.50 and 0.55 Yuan, per kilowatt, (iii) THE INNER MONGOLIA 2 ^nd ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS have the designated 298.8 megawatt ( 6 x 49.8 MW) wind energy power capacity, and a potential up to 996 megawatt ( 20 x 49.8 MW) wind energy power capacity (iv) China Power’s rights under the Construction Agreement are exclusive.

The Construction Agreement also provides that Ontinute shall be responsible for securing all necessary government approvals and ensuring the supply of all required utilities, such as electricity, water, communications and roadways, and China Power shall be responsible for obtaining all required financing for the plants and operating the plants with the most advanced technology available. The development and construction of the plants are estimated to take approximately three (3) years.

Additionally, China Holdings, Inc. and its controlled subsidiary : China Power, Inc. have doubled the commitments for further development, construction and contributions to The Clean Energy Power Plants/Industry in China, or/and worldwide , include Wind Energy, Biomass Clean Energy and Hydropower Plants. The Company will speed up its substantial corporate financings development, and partnerships with global private equity funds, and structure investments to optimize returns of the Company’s global investors, stockholders and investments. The company has increased its commitment to develop and maximize all the stockholders’ value on a long-terms basis.

THE INNER MONGOLIA 1 ^ST ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS ( 298.8 - 996 Mega Watts)

On September 3, 2008, China Power, Inc., China Holdings, Inc.’s controlled subsidiary (“ China Power ”), entered into a Three (3) Years Development and Construction Agreement (the “ Construction Agreement ”) with Ontniute Government (“Ontniute”), Inner Mongolia, People’s Republic of China, pursuant to which China Power was granted the exclusive right to develop and construct THE INNER MONGOLIA ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS with power capacity of 298.8 megawatt ( 6 x 49.8 megawatt), and a potential up to 996 megawatt ( 20 x 49.8MW) wind energy power capacity . Specifically, under the Construction Agreement, Ontniute has agreed to provide China Power with :1). Exclusive and First Refusal Rights with non-competition and non-solicit terms, 2). The land rights for up to 200 square KM (Kilo meters) of land, to develop THE INNER MONGOLIA ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS with power capacity of 298.8 megawatt ( 6 x 49.8 megawatt), and a potential up to 996 megawatt ( 20 x 49.8MW) wind energy power capacity . Conversely, China Power has committed to invest up to 2700 million Yuan ( with 35% in cash equity investment and 65% bank loans) towards the development and construction of the power plants.

In addition to the foregoing, according to the China Central Government’s currently alternative energy laws related to Wind Energy Projects, under the Construction Agreement, Chinese Government has guaranteed (i) the financing for up to 65% of the total 2700 million Yuan through a local bank at a preferred interest rate to China Power committed to the development of the power plants, ii) that 100% of the electricity power generated by the Wind Energy plants shall be purchased by the China State Grid at a purchase price of between 0.50 and 0.55 Yuan, per kilowatt, (iii) THE INNER MONGOLIA ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS have the designated 298.8 megawatt ( 6 x 49.8 MW) wind energy power capacity, and a potential up to 996 megawatt ( 20 x 49.8 MW) wind energy power capacity (iv) China Power’s rights under the Construction Agreement are exclusive.

TaiHu Biomass Energy Power/Plant (50MW) Investment Construction Agreement

On October 28, 2007, China Power entered into a Development and Construction Agreement (the “ Construction Agreement ”) with TaiHu County Government (“TaiHu”), AnHui Province, People’s Republic of China, pursuant to which China Power was granted the exclusive right to develop and construct a 50 megawatt biomass energy power plant. Specifically, under the Construction Agreement, TaiHu has agreed to provide China Power with the land rights for up to 200 MU, or 133,400 square meters of land, to develop a biomass energy power plant. China Power has committed to invest up to 580 million Yuan, or approximately $81,586,000 towards the development of the power plant.

In addition to the foregoing, according to the China Central Government’s currently alternative energy laws related to Biomass Energy Projects, under the Construction Agreement, TaiHu has guaranteed (i) the financing for up to 65% of the 580 million Yuan China Power has committed to the development of the power plant through a local bank at a preferred interest rate, (ii) that 100% of the power generated by the Biomass Energy plant shall be purchased by the China State Grid at a purchase price of between 0.60 and 0.65 Yuan, or approximately $0.09 and $0.08, per kilowatt, (iii) this TaiHu Biomass Energy Power Generation Plant/project has designated with a total potential of 400 million KW/hr power generation capacity approximately annually, (iv) China Power’s rights under the Construction Agreement are exclusive.

The Construction Agreement also provides that TaiHu shall be responsible for securing all necessary government approvals and ensuring the supply of all required utilities, such as electricity, water, communications and roadways, and China Power shall be responsible for obtaining all required financing for the plant and operating the plant with the most advanced technology available. The construction of the plant is estimated to take approximately two years.

Development of the plant shall be done through America-China (TaiHu) Energy Co. Ltd., incorporated under PRC laws by our subsidiary China Power. China Power will complete for the biomass fuel analysis report and the technical feasibilities for further development of the construction for TaiHu Biomass Energy Power/Plant ( 50MW) shortly. Management believes that they have no liabilities with regards to these transactions if the transactions can not be completed.

China Power completed the Fuel Analysis on TaiHu Biomass Energy Power/Plant ( 50MW).

China Power has completed THE FEASIBILITIES STUDY TaiHu Biomass Energy Power/Plant ( 50MW).

China Power has also completed THE FEASIBILITIES STUDY on TaiHu Biomass Energy Power/Plant ( 50MW) as legally approved,contracted and conducted by CHINA ELECTRIC DESIGN AND RESEARCH INSTITUTION, the PRC licensed AAA+ power engneering firm.

The Comnpany is working on “EPC” - engineering, procurement and construction expertise /contracts now with China -State National AAA+ Engineering Firm to construct and build The Company’s TaiHu Biomass Energy Power/Plant ( 50MW) on a turnkey basis/solution, and with upset price guarantees and fixed construction completion timetables.

The Company is also finalizing for the long-term contract with China State-Grid for Electricity Power Sales Contracts with China-State Alternative Energy Policies Gurrantee for Biomass Energy for 100% Power Purchase by State-Grid and Gurrantee for Prices Selling at 0.61 -0.65/KWh.

Ongniute Biomass Energy Power/Plant ( 50MW) Investment Construction Agreement

On March 3, 2008, China Power entered into a Development and Construction Agreement (the “Construction Agreement”) with Ongniute County Government (“Ongniute”), Inner Mongolia Province, People’s Republic of China, pursuant to which China Power was granted the exclusive right to develop and construct a 50 megawatt biomass energy power plant. Specifically, under the Construction Agreement, Ongniute agreed to provide China Power with the land rights for up to 200 MU, or 133,400 square meters of land, to develop a biomass energy power plant, together with an additional 500,000 MU, or 333,500,000 square meters of land, rich in straw resources to support the power plant. Conversely, China Power has committed to invest up to 580 million Yuan, or approximately $81,586,000, towards the development of the power plant, including the payment to Ongniute of 56,000 Yuan, or approximately $7,877, for every 667 square meters of land provided by Ongniute.

In addition to the foregoing, under the Construction Agreement, Ongniute has guaranteed (i) the financing for up to 65% of the 580 million Yuan China Power has committed to the development of the power plant through a local bank at a preferred interest rate, (ii) that 100% of the power generated by the biomass energy plant shall be purchased by the China State Grid at a purchase price of between 0.60 and 0.65 Yuan, or approximately $0.09 and $0.08, per kilowatt and (iii) the payment of 13.2 million Yuan, or approximately $1,856,797, to China Power once construction of the power plant is completed.

The Construction Agreement also provides that Ongniute shall be responsible for securing all necessary government approvals and ensuring the supply of all required utilities, such as electricity, water, communications and roadways, and China Power shall be responsible for obtaining all required financing for the plant and operating the plant with the most advanced technology available. The construction of the plant is estimated to take approximately two years.

China Power’s rights under the Construction Agreement are exclusive, such that Ongniute may not allow the development of any other biomass energy power plants in Ongniute County for three years. In addition, Ongniute has agreed to ensure that the plant is not subject to income taxes for its first three years of operation and then subject to a tax rate of no more than 12.5% for the following three years.

Development of the plant shall be done through Ongniute America-China Green Energy Co. Ltd., which incorporated under PRC laws which is wholly owned by our subsidiary of China Power. China Power, Inc. will complete for the biomass fuel analysis report and the technical feasibilities for further development of the construction for Ongniute Biomass Energy Power/Plant ( 50MW) shortly. Management believes that they have no liabilities with regards to these transactions if the transactions can not be completed.

China Power completed the Fuel Analysis Report on Ongniute Biomass Energy Power/Plant ( 50MW) 。

CHINA ELECTRIC DESIGN AND RESEARCH INSTITUTION is working on FEASIBILITIES STUDY on Ongniute Biomass Energy Power/Plant ( 50MW)ò The Comnpany is working on “EPC” - engineering, procurement and construction expertise /contracts now with China -State National AAA+ Engineering Firm to construct and build The Company’s Ontniute Biomass Energy Power/Plant ( 50MW) on a turnkey basis/solution, and with upset price guarantees and fixed construction completion timetables.

Huaxian Biomass Energy Power/Plant ( 50MW) Investment Construction Agreement

On March 19, 2008, China Powerentered into a Development and Construction Agreement (the “ Construction Agreement ”) with Huaxian County Government (“Huaxian”), Hunan Province, People’s Republic of China, pursuant to which China Power was granted the exclusive right to develop and construct a 50 megawatt biomass energy power plant. Specifically, under the Construction Agreement, Huaxian has agreed to provide China Power with the land rights for up to 200 MU, or 133,400 square meters of land, to develop a biomass energy power plant. Conversely, China Power has committed to invest up to 580 million Yuan, or approximately $81,586,000 towards the development of the power plant.

In addition to the foregoing, according to the China Central Government’s currently alternative energy laws related to Biomass Energy Projects, under the Construction Agreement, Huaxian has guaranteed (i) the financing for up to 65% of the 580 million Yuan China Power has committed to the development of the power plant through a local bank at a preferred interest rate, (ii) that 100% of the power generated by the Biomass Energy plant shall be purchased by the China State Grid at a purchase price of between 0.60 and 0.65 Yuan, or approximately $0.09 and $0.08, per kilowatt, (iii) this Huaxian Biomass Energy Power Generation Plant/project has designated with a total potential of 400 million KW/hr power generation capacity approximately annually, (iv) China Power’s rights under the Construction Agreement are exclusive.

The Construction Agreement also provides that Huaxian shall be responsible for securing all necessary government approvals and ensuring the supply of all required utilities, such as electricity, water, communications and roadways, and China Power shall be responsible for obtaining all required financing for the plant and operating the plant with the most advanced technology available. The construction of the plant is estimated to take approximately two years. Management believes that they have no liabilities with regards to these transactions if the acquisitions can not be completed.

LongHua Biomass Energy Power Plant/ Project(50MW) Investment and Construction Agreement

On October 10, 2007, China Power entered into an agreement with LongHua Government and BeiJing JinRenTaiHe Trade Ltd. Government to develop and construct a biomass energy power generation plant with a power capacity of 50MW. The parties estimate that it will take 2 years to complete the construction of the biomass energy generation plant at a cost of RMB $580million (approximately USD$78 million) comprising of a cash investment of 35% and bank loans of 65%. The biomass energy power plant will be located at LongHua county in the town of TangTouGou village of LuoYing on a total of 200 MU lands. The Agreement provides that the LonHua Government will pay for the cost of the land and shall grant China Power the right to use the land for a term of 50 years in accordance with the State’s land use policy.

Pursuant to the terms of the agreement, the LongHua government will be responsible for (A) the coordination with the state, provincial and city governments; (B) registration of the project with the required governmental bodies; (C) providing tax incentives to China Power upon completion of the project; (D) assisting the Company with obtaining an additional 10-15 MU lands for the cultivation of the necessary biomass resources; and (E) allowing the Company to construct a well to provide water for construction of the plant.

The Company agreed to provide the LongHua government with RMB$1.65 million (approximately USD$222,000) in connection with the documentation and approval process necessary for the construction permits for the biomass plant. The LongHua government has agreed to provide the Company will legal exclusive rights for the construction and operation of the plant and agreed not to engage in the construction of a similar biomass plant.

On January 23 2008, China Power executed an Amended Agreement with BeiJing JinRenTaiHe Trade Ltd. and Long-Hua Local Government that the 100% development rights of LongHua County Biomass Energy Power Plant/ Project (50MW) for further Investment and Construction Agreement will be fully legally 100% Development Rights transfer to China Power.

China Power will complete the biomass fuel analysis report and the technical feasibilities for further development of the construction for Long-Hua Biomass Energy Power/Plant ( 50MW) shortly. Management believes that they have no liabilities with regards to these transactions if the transactions can not be completed.

Con Yang Biomass Energy Power Plant/ Project(50MW) Investment and Construction Agreement

On October 29, 2007, China Power entered into an agreement to cooperate with the Con Yang Government. Pursuant to the agreement the Con Yang Government agreed to provide the Company with 200 MU lands in the Con Yang economic industry zone to develop and construct a biomass energy generation plant. The agreement contemplates the entry into a Lands Rights Agreement with the Con Yang Government Land & Resources Department for a term of 50 years. The parties anticipate that the total cost of the project to be RMB $580 million (approximately USD$78 million) comprising of a cash investment of 35% and bank loans of 65% and anticipate completion in 2010. The Agreement provides that the Con Yang Government will provide the Company will the lands for the cultivation of the straw and raw materials necessary for the project for a term of 50 years. In addition, the Agreement provides that it will be effective in 6 months until China provides a biomass projects feasibility study and contemplates the entry into a further agreement for execution of the biomass energy projects.

Management believes that they have no liabilities with regards to this transaction if the transaction can not be completed.

Acquisition Agreement with Hunan Zhangjiajie Chalinhe Electric Power Co., Ltd to Acquiring 100% Interest of Chalinhe Hydropower Station (54 MW-72MW)

On July 27 2007, China Power, Inc. entered into an acquisition definitive agreement for the acquisition of Hunan Zhangjiajie Chalinhe Electric Power Co., Ltd and its Chalinhe Hydropower Station (54 MW-72MW). The purchase price for the assets shall consist of (i) a cash payment in the amount of 380 million RMB (approximately USD$50 million), and (ii) the assumption of a bank loan in the amount of 300 million RMB ($USD40 million).The Chalinhe Hydropower Station comprises a reservoir with a dam 95 meters high and a total land position of 90,064 square meters. Specifications for the dam consist of a dead water level of 77 meters, design flood level of 88.31 meters, check flood level of 92.81 meters and a total power generation capacity of 72,000 kW (4×18,000 kW).

Upon completion of the first stage of the power station, Chalinhe Electric Power Co. anticipates the total installed power production capacity will be approximately 54,000 kW. However, implementation of the first stage of the project is dependent on Hunan Zhangjiajie Chalinhe Electric Power raising sufficient funds. Hunan Zhangjiajie Chalinhe Electric Power does not currently have any financing commitments and there is no guarantee that they will be able to raise any funds to implement their plans.

The electricity sale price is expected to be RMB 0.316 Yuan/kWh (or approximately USD $0.042/kWh) pursuant to an existing contract with the China State Grid. In addition, the Chalinhe Hydropower Station has full legal approved rights to CDM (Clean Development Mechanism) projects and full legal rights for development of an additional 18,000 kW capacity to bring the total power generation capacity to 72,000 kW.

The Agreement contemplates that the transaction will be completed at a closing to be held on the first business day after the closing conditions are met or waived, or on a date agreed upon by the parties. The closing conditions include, but are not limited to: (i) the satisfactory completion by each party of a review of the business operations, finances, assets and liabilities of the other party, (ii) delivery of such certificates and closing documents as each party's counsel may request, and (iii) the approval of all of the shareholders of Hunan Zhangjiajie Chalinhe Electric Power Co., Ltd.

The acquisition is subject to the Company completing certain due diligence requirements and obtaining financing from third parties. As of June 30 2008, the transaction has not closed. Management has not determined if it can complete this transaction. Management believes that they have no liabilities with regards to this transaction if the acquisition can not be completed.

Acquisition Transaction Agreement with Tong Ren KaiYu Minerals Co. Ltd.

On November 30, 2007, the Company entered in a transaction agreement which provides for the acquisition by the Company of 100% of the issued and outstanding shares of Tong Ren KaiYu Minerals Co. Ltd. This agreement provides the comprehensive terms of the acquisition and expands on the parties’ agreement dated October 27, 2007.

In consideration for the shares, the Company agreed to pay (A) RMB $100 million (approximately USD $13,500,000) in cash; (B) RMB $50 million (approximately USD $6,750,000) in shares of common stock valued at a price of $0.05 per shares; (C) RMB $150 million (approximately USD $20 million) in shares of common stock valued at the average of closing price of the Company’s common stock in the 5 day period prior to closing and the 5 day period after the closing.

The agreement provides for a closing when all of the conditions set forth in the agreement have been fulfilled. Ton Ren KaiYu owns three mineral exploration licenses and two mining exploration licenses.

Tong Ren KaiYu has agreed to provide the Company with legal exclusive/first refusal rights for this acquisition. The parties have agreed to provide each other with all documentation necessary to complete their due diligence investigation of each company’s business.

The Company has issued 7,000,000 shares of its common stock as a security deposit to “Tong Ren Kai Yu” and its beneficiary nominee already. The parties agreed that if Tong Ren KaiYu meets its obligation under the financials and the Company does not consummate the transaction, then, Tong Ren KaiYu shall have the right to retain the shares. However, if Tong Ren KaiYu does not complete its obligations under this agreement the Company will be permitted to place stop transfer restrictions on the shares.

The Company intends to form a subsidiary in China or Hong Kong to complete the acquisition withg Ton Ren KaiYu.

The acquisition is subject to the Company completing certain duel diligence requirements and obtaining financing from third parties. As of June 30 2008, the transaction has not closed. Management has not determined if it can complete this transaction. Management believes that they have no liabilities with regards to this transaction if the acquisition can not be completed.

Future Development

We are in the process of identifying merger and/or acquisitions candidates in the Peoples Republic of China and worldwide as part of our growth plan to secure a strong future. Our acquisition strategy highlights our updated growth strategy to accrete value to our shareholders through the strategic combination of assets of energy and renewable energy projects (such as hydropower plant and biomass energy projects, etc), mineral resources and natural medicinal products in China and throughout the world. Growth by acquisition is an important component of our updated business model. As the Chinese government policy continues to change and move towards privatization of businesses, our focus on the emerging opportunities in China will primarily focus on small and medium-sized enterprises. Management believes that our growth strategy will enable the company to secure a strong future and a powerful position in the global assets holding company.

If we are successful in raising $150 million of financing in order to expand our business and fund future development, we anticipate the following expenses over the next twelve months: (a) $150,000 to develop our Internet website and e-commerce system in multi-languages; (b) $200,000 for media advertising to promote our brand name; (c) $200,000 for our research and development program; (d) $400,000 for an investor relations program; (f) $500,000 for professional and consultant fees; (g) $1,800,000 for general working capital, including product development, inventory, and general and administrative expenses; and (h) $146,750,000 for merger and acquisitions and joint-ventures.

If the Company is only successful in raising $3 million of financing to sustain its current level of business operations, we anticipate the following expenses over the next twelve months: (a) $150,000 to develop its Internet website and e-commerce system in multi-languages; (b) $200,000 for media advertising to promote our brand name; (c) $200,000 for its research and development program; (d) $400,000 for an investor relations program; (f) $500,000 for professional and consultant fees; and (g) $1,800,000 for general working capital, including product development, inventory, and general and administrative expenses.

RESULTS OF OPERATIONS

Quarter Ended September 30, 2008 Compared to Quarter Ended September 30, 2007

We had a net loss of $599,672 for the three months ended September 30, 2008 as compared to a net loss of $916,550 for the three months ended September 30, 2007. The decrease in net loss for the three months ended September 30, 2008 was the result of decreased consulting fees, from $283,503for the three months ended September 30, 2007 as compared to $17,380 for the three months ended September 30, 2008. and decreased Investor Relations from $31,426 for the three months ended September 30, 2007 as compared to $3,390 in the comparable period in 2008, and decreased management fees from $267,735 for the three months ended September 30, 2007 as compared to $120,000 in the comparable period in 2008

Other Income (Expenses) was $0 for the three months ended September 30, 2008 as compared to $0 for the three months ended September 30, 2007.

The company intends on keeping it's expenses low as it seeks out it's acquisition targets. The company will likely use stock as a means of compensation for certain expenses such as consulting, investor relations and other services management has determined it has to incur.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2008, we had cash of $1,525. Our current liabilities as of September 30, 2008 aggregated $1,960,746. As of September 30, 2008, we had a working capital deficiency of 1,932,679and an accumulated deficit of $18,852,686. To date, our operations have been funded through loans advanced from our Chief Executive Officer, Julianna Lu, and our Vice Chairman, XiaoFei Yu, and through issuances of shares of our common stock.

As of September 30, 2008, Julianna Lu/The Chairman/Founder/Chief Executive Officer and Xiaofei Yu/Vice Chairman routinely advanced funds as loans to the Company for a total of $1,491,609, and $414,164 respectively. These funds /loans are unsecured and so not have a due date of return. The Company accrues interest at 10% per annum on all these advances.

As of September 30, 2007, Julianna Lu/CEO/Chairman/CFO has loaned a total of $894,121, to the Companyôand XiaoFei Yu/Vice Chairman, has loaned a total of $266,390 to the Company. These amounts increased as the result of Ms. Lu's and Mr. Yu's cash loans to the company as well as accrued compensation and interest charged on the loans. There are no formal agreements for when repayment of the loans must be made. The loans accrue interest at the rate of 10% per annum

The company intends on keeping it's expenses low as it seeks out it's acquisition targets. The company will likely use stock and stocks options as a means of compensation for certain expenses such as consulting, investor relations and other services management has determined it has to incur.

While we have raised capital to meet our working capital and financing needs in the past, additional financing is required within the next 12 months in order to meet our current and projected cash flow deficits from operations and development. We have sufficient funds to conduct our operations for several months, but not for 12 months or more. Further, in order to expand our business, fund future development and begin marketing and selling our three product lines and pursue our acquisition strategy, we will need to raise at least $25 million over the next twelve to twenty-four months. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all.

By adjusting our operations and development to the level of capitalization, we believe we have sufficient capital resources to meet projected cash flow deficits. However, if we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on our business, results of operations liquidity and financial condition.

Our registered independent certified public accountants have stated in their report that we have incurred operating losses in the last two years, and that we are dependent upon management's ability to develop profitable operations. These factors among others may raise substantial doubt about our ability to continue as a going concern.

We presently do not have any available credit, bank financing or other external sources of liquidity. Due to our brief history and historical operating losses, our operations have not been a source of liquidity. We will need to obtain additional capital in order to expand operations and become profitable. We intend to pursue the building of a re-seller network outside the United States, and if successful, the re-seller agreements would constitute a source of liquidity and capital over time. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. There can be no assurance that we will be successful in obtaining additional funding and execution of re-seller agreements outside the Unites States.

We will still need additional investments in order to continue operations to cash flow break even. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and the downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

These conditions raise substantial doubt about our ability to continue as a going concern.

Critical Accounting Policies and Estimates

We have identified one policy area as critical to the understanding of our consolidated financial statements. The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. In particular, management makes estimates concerning the valuation of stock based transactions. Stock based transactions include issuance of stock for services and for intangible assets such as technologies or licenses. Stock based transactions also include issuance of stock options and warrants for services and intangibles.

We suggest that our significant accounting policies, as described in our Form 10-KSB/ Form 10-KSB/A filed for the year ended December 31, 2007 on April 18, 2008, be read in conjunction with this Management's discussion and Analysis of Financial Condition and Results of Operations.

Inflation

It is our opinion that inflation has not had a material effect on our operations and we do not anticipate it will in the future.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

ITEM 1A

RISK FACTORS.

Risks Related to our Company

We have limited history of operations and we cannot assure you that our business model will be successful in the future or that our operations will be profitable.

We began operations in 2002 and commenced trading as a public company on the OTC Bulletin Board in the middle of 2005. Our operating results for future periods will include significant expenses, including mergers and acquisition, marketing costs, and administrative and general overhead expenses as we implement our business model to expand our operations. As a result, we are unable to predict whether we will report profitable operations in the future. There can be no assurances whatsoever that we will be able to successfully implement our business model, identify and close acquisitions of operating companies, penetrate our target markets or attain a wide following for our services. We are subject to all the risks inherent in an early stage enterprise which has experienced rapid growth through acquisitions and our prospects must be considered in light of the numerous risks, expenses, delays, problems and difficulties frequently encountered in those businesses.

The success of our business model is dependent upon our ability to identify and close acquisitions of operating companies in China. The acquisition of new businesses is costly and such acquisitions may not enhance our financial condition.

Our primary business strategy is to acquire companies and identify and acquire assets and technologies from businesses in China that have services, products, technologies, industry specializations or geographic coverage that extend or complement our existing business. The process to undertake a potential acquisition is time-consuming and costly. We expect to expend significant resources to undertake business, financial and legal due diligence on our potential acquisition targets, and there is no guarantee that we will acquire the company after completing due diligence. The process of identifying and consummating an acquisition could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities and exposure to undisclosed or potential liabilities of acquired companies. We have not consummated any acquisitions at this time and there can be no assurance that the addition of targeted businesses will enhance shareholder value.

Acquisition efforts in future periods may be dilutive to our then current stockholders.

Our business model depends upon the issuance of our securities to consummate acquisitions in the future. As a result, the percentage ownership of our company held by existing stockholders will be reduced and those stockholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock. As we will generally not be required to obtain the consent of our stockholders before entering into acquisition transactions, stockholders are dependent upon the judgment of our management in determining the number of, and characteristics of stock issued as consideration in an acquisition.

We will need additional financing which we may not be able to obtain on acceptable terms. Additional capital raising efforts in future periods may be dilutive to our then current stockholders or result in increased interest expense in future periods.

We will need to raise additional working capital to continue to implement our business model. While our business model contemplates the potential for the issuance of equity securities for the stock of acquired companies, capital may be needed for the acquisition of these companies. Capital will also be needed for the effective integration, operation and expansion of these businesses. Our future capital requirements, however, depend on a number of factors, including our operations, the financial condition of an acquisition target and its needs for capital, our ability to grow revenues from other sources, our ability to manage the growth of our business and our ability to control our expenses. If we raise additional capital through the issuance of debt, this will result in increased interest expense. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our company held by existing stockholders will be reduced and those stockholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock. We cannot assure you that we will be able to raise the working capital as needed in the future on terms acceptable to us, if at all. If we do not raise funds as needed, we will be unable to fully implement our business model, fund our ongoing operations or grow our company.

Our financial status creates doubt whether we will continue as a going concern.

The Company has a working capital deficiency of $1,932,679n accumulated deficit of $18,852,686 and a stockholders’ deficit of $1,923,670 as of September 30, 2008 and has incurred significant losses since inception. With our current resources, such as shareholder loans, we expect to be able to satisfy our cash requirements through June 30 , 2009.There are no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not available we may be forced to discontinue operations, which would cause investors to lose the entire amount of their investment.

We need significant infusions of additional capital, which may result in dilution to our shareholders' ownership and voting rights in our company.

Based upon our current cash reserves and forecasted operations, we believe that we will need to obtain at least $50 million of outside funding in order to sustain our current business operations over the next twelve months, and at least $150 million of outside funding in order to expand our business, fund future development and complete our acquisition projects. We have not in the past raised any funds and our operations have been funded primarily through loans from our officers and the issuance of shares of our common stock. Our need for capital to finance our business strategy, operations, and growth will be greater should, among other things, revenue or expense estimates prove to be incorrect. If we fail to arrange for sufficient capital in the future, we may be required to reduce the scope of our business activities, terminate our acquisition agreements and curtail plans to construct the biomass plants. In addition, we may not be able to obtain additional financing in sufficient amounts or on acceptable terms when needed, which could adversely affect our operating results and prospects. Debt financing must be repaid regardless of whether or not we generate profits or cash flows from our business activities. Equity financing may result in dilution to existing shareholders and may involve securities that have rights, preferences, or privileges that are senior to our common stock.

Our management may be unable to effectively integrate our acquisitions and to manage our growth and we may be unable to fully realize any anticipated benefits of these acquisitions.

We are subject to various risks associated with our growth strategy, including the risk that we will be unable to identify and recruit suitable acquisition candidates in the future or to integrate and manage the acquired companies. We face particular challenges in that our acquisition strategy is based on companies located in and operating within China. Acquired companies' histories, the geographical location, business models and business cultures will be different from ours in many respects. Even if we are successful in identifying and closing acquisitions of companies, our directors and senior management will face significant challenges in their efforts to integrate the business of the acquired companies or assets and to effectively manage our continued growth. Any future acquisitions will be subject to a number of challenges, including:

the diversion of management time and resources and the potential disruption of our ongoing business;

difficulties in maintaining uniform standards, controls, procedures and policies;

potential unknown liabilities associated with acquired businesses;

the difficulty of retaining key alliances on attractive terms with partners and suppliers; and

the difficulty of retaining and recruiting key personnel and maintaining employee morale.

There can be no assurance that our efforts to integrate the operations of any acquired assets or companies will be successful, that we can manage our growth or that the anticipated benefits of these proposed acquisitions will be fully realized.

We are dependent upon our management and our ability to hire key personnel.

The success of our company is largely dependent on the personal efforts of Julianna LuñThe Chairman /Founder/Chief Executive Officer and Xiaofei Yu. Although we have employment agreements with these officers, the loss of the services of either of them would have a material adverse effect on our business and prospects. In addition, in order for us to undertake our operations as contemplated, it will be necessary for us to locate and hire experienced personnel who are bilingual and knowledgeable in the U.S. capital markets, China and generally accepted accounting principles applicable to U.S. companies. Our failure to attract and retain such experienced personnel on acceptable terms will have a material adverse impact on our ability to grow our business.

Certain agreements to which we are a party and which are material to our operations lack various legal protections which are customarily contained in similar contracts prepared in the United States.

Much of our business and operations are located in China. In addition, we are a party to certain contracts related to our operations. While these contracts contain the basic business terms of the agreements between the parties, these contracts do not contain certain provisions which are customarily contained in similar contracts prepared in the U.S., such as representations and warranties of the parties, confidentiality and non-compete clauses, provisions outlining events of defaults, and termination and jurisdictional clauses. Because these contracts omit these types of clauses, notwithstanding the differences in Chinese and U.S. laws, we may not have the same legal protections as we would if the contracts contained these additional provisions. We anticipate that our Chinese subsidiaries will likely enter into contracts in the future which will likewise omit these types of legal protections. While we have not been subject to any adverse consequences as a result of the omission of these types of clauses, and we consider the contracts to which we are a party to contain all the material terms of our business arrangements with the other party, future events may occur which lead to a dispute under agreements which could have been avoided if the contracts were prepared in conformity with U.S. standards. Contractual disputes which may arise from this lack of legal protection will divert management’s time from the operation of our business and require us to expend funds attempting to settle a possible dispute. This possible diversion of management time will limit the time our management would otherwise devote to the operation of our business, and the diversion of capital could limit the funds we have available to pay our ongoing operating expenses.

Intensive competition for our subsidiaries will substantially affect our operating performance.

Each of our subsidiaries are development stage businesses. As such, the operations are subject to all the risks inherent in launching a new business enterprise, in developing and marketing a new product or service, and in establishing a name and a business reputation. The likelihood of our success must be considered in light of problems, expenses, difficulties and delays frequently encountered in converting prototype designs into viable production designs, and in achieving market acceptance with a new type of product or service. Each of the newly formed entities have had no product revenues to date, have operated at a loss since inception, and will likely sustain operating losses for an indeterminate time period. There can be no assurance that we will ever generate material revenues or that we will ever be profitable.

Because of the speculative nature of exploration of mineral properties, there is a substantial risk that our business will fail.

The search for valuable minerals as a business is extremely risky. Exploration for minerals is a speculative venture necessarily involving substantial risk. The expenditures to be made by us in the exploration of the optioned mineral properties may not result in the discovery of commercial quantities of minerals. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan.

Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.

The search for valuable minerals involves numerous hazards. As a result, we may become subject to liabilities for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.

Our targeted industries are heavily regulated and we may not be able to remain in compliance with all such regulations and we may be required to incur substantial costs in complying with such regulation.

Our business of acquiring mining projects, properties and companies in China is subject to extensive regulation by China's Mining Ministry, and by other provincial, county and local authorities in jurisdictions in which products are processed or sold, regarding the processing, storage, and distribution of mineral products. In addition, processing facilities are subject to periodic inspections by government agencies. We may not be able to comply with current laws and regulations, or any future laws and regulations. To the extent that new regulations are adopted, we will be required to conform our activities in order to comply with such regulations. We may be required to incur substantial costs in order to comply. Our failure to comply with applicable laws and regulations could subject us to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions which could have a material and adverse effect on our business operations and finances. Changes in applicable laws and regulations may also have a negative impact on our sales.

Our business of acquiring China based pharmaceutical companies is also subject to extensive regulation by China's Health Ministry, and by other provincial, county and local authorities in jurisdictions in which pharmaceutical drugs/products are processed or sold, regarding the processing, storage, and distribution of such products. In addition, processing facilities are subject to periodic inspection by government agencies. We may not be able to comply with current laws and regulations, or any future laws and regulations. To the extent that new regulations are adopted, we will be required to conform our activities in order to comply with such regulations. We may be required to incur substantial costs in order to comply. Our failure to comply with applicable laws and regulations could subject us to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions which could have a material and adverse effect on our business operations and finances. Changes in applicable laws and regulations may also have a negative impact on our sales.

Compliance with governmental regulations may impose additional costs, which may adversely affect our financial condition and results of operations.

The processing, formulation, manufacturing, packaging, labeling, advertising and distribution of China Health’s products are subject to regulation by one or more federal agencies, including the Health Protectorate Branch in Canada, the FDA, the Federal Trade Commission ("FTC"), the Consumer Product Safety Commission, the United States Department of Agriculture, the United States Customs and Border Protection and the Environmental Protection Agency. These activities are also regulated by various agencies of the states and localities in which our products are sold.

The FDA may attempt to regulate any of China Health’s products that fall within its jurisdiction, and the FTC has jurisdiction to regulate the advertising of our products that fall within its jurisdiction. The FDA may not accept the evidence of safety for any new ingredients that we may want to market, may determine that a particular product or product’s ingredient present an unacceptable health risk, may determine that a particular statement of nutritional support that we want to use is an unacceptable drug claim or an unauthorized version of a food "health claim," may determine that a particular product is an unapproved new drug, or the FDA or the FTC may determine that particular claims are not adequately supported by available scientific evidence. Such a determination would prevent us from marketing particular products or using certain statements of nutritional support on our potential products. One of the key areas of our development focus is the specialty supplements category, which includes products that are directed at particular nutritional concerns. The FDA may not agree with China Health’s statements of nutritional support as to a particular specialty supplement or permit China Health to promote its specialty supplements directed at particular nutritional concerns. China Health also may be unable to disseminate third-party literature in connection with its potential products if the third-party literature fails to satisfy certain requirements. In addition, the FDA could require China Health to remove a particular product from the market. Any future recall or removal would result in additional costs to us, including lost revenues from any potential products that China Health is required to remove from the market, any of which could be material. Any such product recalls or removals could lead to liability, substantial costs and reduced growth prospects.

Although the regulation of dietary supplements is less restrictive than the regulation of drugs, dietary supplements may not continue to be subject to less restrictive regulation. Many of China Health’s dietary supplements contain traditional Chinese herbs which may or may not have been previously evaluated by the FDA. All herbs marketed in dietary supplements in the United States must be Generally Recognized as Safe (GRAS). The FDA maintains a list of problems herbs. If any of the herbs in China Health’s products appeared on the FDA's list, or if the agency determined there were issues concerning their safety, China Health would not be able to market the products containing these ingredients in the United States. We have not determined whether any of the herbs in China Health’s products are on the FDA's list of problem herbs and we have not determined whether any such herbs are Generally Recognized as Safe. If any of the herbs in China Health’s products have not been evaluated by the FDA and are not Generally Recognized as Safe, then China Health would not be permitted to sell products containing them in the United States. Any such prohibition could materially adversely affect our results of operations and financial condition.

Further, if more stringent statutes are enacted for dietary supplements, or if more stringent regulations are promulgated, China Health may not be able to comply with such statutes or regulations without incurring substantial expense, or at all. Legislation has been introduced in Congress to impose substantial new regulatory requirements for dietary supplements including adverse event reporting, post market surveillance requirements, FDA reviews of dietary supplement ingredients, safety testing and records inspection. If enacted, any of the proposed legislation may result in difficulty getting China Health’s products to the market and could raise our costs and hinder our business.

In addition, we expect that the FDA soon will adopt the proposed rules on Good Manufacturing Practice in manufacturing, packaging, or holding dietary ingredients and dietary supplements, which will apply to the products we manufacture. These regulations will require dietary supplements to be prepared, packaged and held in compliance with strict rules, and will require quality control provisions similar to those in the Good Manufacturing Practice regulations for drugs. China Health may not be able to comply with the new rules without incurring additional expenses.

Each of China Health’s products imported into the United States may be blocked at the border by U.S. Customs. The FDA could issue Import Alerts for any of our products if the agency considers them to be misbranded, adulterated and/or unapproved new drugs.

The FTC exercises jurisdiction over the advertising of dietary supplements. In the past, the FTC has instituted numerous enforcement actions against dietary supplement companies for failure to have adequate substantiation for claims made in advertising or for the use of false or misleading advertising claims. These enforcement actions have often resulted in consent decrees and the payment of civil penalties by the companies involved.

We are also subject to regulation under various state, local, and international laws that include provisions governing, among other things, the processing, formulation, manufacturing, packaging, labeling, advertising and distribution of our products that are deemed "dietary supplements" or "over-the-counter drugs." Government regulations in foreign countries may prevent or delay the introduction, or require the reformulation, of certain of our products. In addition, from time to time in the future, Congress, the FDA, the FTC or other federal, state, local or foreign legislative and regulatory authorities may impose additional laws or regulations that apply to China Health, repeal laws or regulations that we consider favorable to China Health or impose more stringent interpretations of current laws or regulations. We are not able to predict the nature of such future laws, regulations, repeals or interpretations or to predict the effect additional governmental regulation, when and if it occurs, would have on China Health’s business in the future. Such developments could, however, require reformulation of certain products to meet new standards, recalls or discontinuance of certain products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of certain products, additional or different labeling, additional scientific substantiation, or other new requirements. Any such developments could have a material adverse effect on our business, financial condition and results of operations.

The issuance of shares of our common stock to fund our operations and as consideration at the closing of our acquisition targets will result in significant dilution to our existing shareholders.

To date our operations have been funded through cash advances from our officers and through the issuance of shares of our common stock. There can be no assurance that our officers will continue to fund our operations. The issuance of shares of our common stock will result in dilution to our existing holders. Further, to proceed with the closing of our acquisition targets in China, we will be required to issue shares of our common stock as consideration, this will result in significant dilution to our existing shareholders. The amount of dilution will be dependent upon the terms on which we issue shares of our common stock.

Risks Related o Our Business

We are a development stage company and have a limited operating history upon which an evaluation of our company can be made. For that reason, it would be difficult for a potential investor to judge our prospects for success.

We were organized in April 2002 and have had limited operations since our inception from which to evaluate our business and prospects. There can be no assurance that our future proposed operations will be implemented successfully or that we will ever have profits. If we are unable to sustain our operations, our shareholders may lose their entire investments. We face all the risks inherent in a new business, including the expenses, difficulties, complications and delays frequently encountered in connection with conducting operations, including capital requirements and management's potential underestimation of initial and ongoing costs. As a new business, we may encounter delays and other problems in connection with the methods of product distribution that we implement. We also face the risk that we will not be able to effectively implement our business plan. In evaluating our business and prospects, these difficulties should be considered. If we are not effective in addressing these risks, we will not operate profitably and we may not have adequate working capital to meet our obligations as they become due.

We may incur material product liability costs.

If our subsidiary, China Health, were to be engaged in the business of formulating and selling nutritional supplements for human consumption. As a distributor of products designed for human consumption, we are subject to product liability claims if the use of our products is alleged to have resulted in injury. We may be subject to various product liability claims, including, among others, allegations that our products include inadequate instructions for use or inadequate warnings concerning possible side effects and interactions with other substances. In addition, although our manufacturers maintain quality controls and procedures with respect to products that we sell, our products could contain contaminated substances. All of the products we sell are produced by third-party manufacturers. As a distributor of products manufactured by third parties, we may also be liable for various product liability claims for products we do not manufacture even though we have no control over the manufacturing procedures used in connection with the production of these third-party products. We are in the process of applying for product liability insurance. Such insurance, once obtained, may not be available at a reasonable cost, or may not be adequate to cover liabilities.

If we are not able to manage growth of our business, our financial condition and results of operations will be negatively affected.

We have expanded our business into renewable energy resources and have entered into agreements to cooperate to construct a number of biomass energy power plants. We also entered into an agreement to acquire Chalinhe Hydropower station. In addition, we have entered into an agreement to acquire Tong Ren KaiYu Minerals which owns 3 minerals licenses. We have not completed any of these planned acquisitions and expansion projects. If and when we consummate one or more of these transactions, we may experience a period of significant growth. Any future growth could cause significant strain on our managerial, operational, financial and other resources. Success in managing this expansion and growth will depend, in part, upon the ability of our senior management to effectively manage the growth of our business. Any failure to manage the proposed growth and expansion of our business could have a material adverse effect on our financial condition and results of operations.

Our strategy of growth through acquisitions is inherently risky.

Our strategy is to identify and target merger and/or acquisition candidates in China and throughout the world. Although we have signed a number of acquisition agreements to date, there can be no assurance that any or all of such acquisitions will be completed. Even if these acquisitions are completed, the final terms of the acquisition agreements may vary substantially from the terms described in the agreements. We have also entered into agreements to cooperate to construct a number of biomass energy power plants in China. These agreements require the investment of significant capital and require the approval of the appropriate administrative and regulatory bodies in China.

Our acquisition of companies and businesses and expansion of operations involve risks, including the following:

the potential inability to identify the companies best suited to our business plan;

the potential inability to successfully integrate acquired operations and businesses or to realize anticipated synergies, economics of scale or other expected value;

the potential need to restructure, modify or terminate customer relationships of the acquired company; and

loss of key employees of acquired operations.

The occurrence of any one or more of these risks could result in a material adverse effect on our operations.

If we fail to acquire and develop other products or product candidates, we may be unable to grow our business.

China Health licenses the rights to a majority of its neutraceutical products from outside third parties. As part of China Health’s growth strategy, we intend to license or acquire additional products and product candidates for development and commercialization. The success of this strategy depends upon our ability to identify, select and acquire the right product candidates. Any product candidate we license or acquire may require additional development efforts prior to commercial sale, including extensive clinical testing and approval by regulatory authorities. All product candidates are prone to the risks of failure inherent in product development, including the possibility that the product candidate will not be shown to be sufficiently safe and effective. In addition, we cannot assure you that any products that we license or acquire will be manufactured or produced economically, successfully commercialized or widely accepted in the marketplace. Proposing, negotiating and implementing an economically viable product acquisition or license is a lengthy and complex process. Other companies, including those with substantially greater financial, marketing and sales resources, may compete with us for the acquisition or license of product candidates. We may not be able to acquire or license the rights to additional products on terms that we find acceptable, or at all.

If our relationships with our manufacturers terminate, or their facilities are damaged or destroyed, we may be unable to develop or commercialize our products.

Currently, only a limited number of companies manufacture China Health’s products. The number of contract manufacturers with the expertise, required regulatory approvals and facilities to manufacture China Health’s product candidates on a commercial scale is extremely limited, and it would take a significant amount of time to arrange for alternative manufacturers. If any of China Health’s manufacturers fail to deliver the required commercial quantities of bulk substance or finished product on a timely basis and at commercially reasonable prices, and we are unable to find one or more replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volumes and quality, and on a timely basis, China Health will likely be unable to meet customer demand as it begins to market and sell its existing product lines.

Risks Related to Doing Business in the People’s Republic of China

We face the risk that changes in the policies of the government of the People’s Republic of China could have a significant impact upon our business and profitability.

The economy of the People’s Republic of China is in a transition from a planned economy to a market oriented economy subject to five-year and annual plans adopted by the government that set national economic development goals. Policies of the People’s Republic of China can have significant effects on the economic conditions of the People’s Republic of China. The government of the People’s Republic of China has confirmed that economic development will follow the model of a market economy. Under this direction, we believe that the People’s Republic of China will continue to strengthen its economic and trading relationships with foreign countries and business development in the People’s Republic of China will follow market forces. While we believe that this trend will continue, there can be no assurance that this will be the case. A change in policies by the government of the People’s Republic of China could adversely affect our interests by, among other factors:

changes in laws,

	·		imposition of new regulations or the interpretations of such regulations,

	·		confiscatory taxation,

	·		restrictions on currency conversion, imports or sources of supplies, or

	·		the expropriation or nationalization of private enterprises.

Although the government of the People’s Republic of China has been pursuing economic reform policies for more than two decades, there is no assurance that the government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting political, economic and social life in the People’s Republic of China.

The laws and regulations of the People’s Republic of China governing our current business operations are sometimes vague and uncertain. Any changes in these laws and regulations may have a material and adverse effect on our business.

There are substantial uncertainties regarding the interpretation and application of laws and regulations of the People’s Republic of China, including but not limited to, the laws and regulations governing our business, or the enforcement and performance of our arrangements with customers in the event of the imposition of statutory liens, death, bankruptcy and criminal proceedings. The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance by foreign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new laws or regulations of the People’s Republic of China may have on our businesses.

A slowdown or other adverse developments in the economy of the People’s Republic of China may materially and adversely affect our customers, demand for our products and our business.

Much of our operations are conducted in the People’s Republic of China. Although the economy of the People’s Republic of China has grown significantly in recent years, we cannot assure investors that such growth will continue. The renewable energy industry in the People’s Republic of China is relatively new and growing, and we therefore do not know how sensitive it is to a slowdown in economic growth or other adverse changes in the economy of the People’s Republic of China. A slowdown in overall economic growth, an economic downturn or recession or other adverse economic developments in the People’s Republic of China could materially reduce the demand for our products and materially and adversely affect our business.

Inflation in the People’s Republic of China could negatively affect our profitability and growth.

While the People’s Republic of China economy has experienced rapid growth, such growth has been uneven among various sectors of the economy and in different geographical areas of the country. Rapid economic growth can lead to growth in the money supply and rising inflation. If prices for our products rise at a rate that is insufficient to compensate for the rise in the costs of supplies, it may have an adverse effect on profitability. In order to control inflation in the past, the People’s Republic of China has imposed controls on bank credits, limits on loans for fixed assets and restrictions on state bank lending. Such an austere policy can lead to a slowing of economic growth. On October 28, 2004, the People’s Bank of China, the People’s Republic of China’s central bank, raised interest rates for the first time in nearly a decade and indicated in a statement that the measure was prompted by inflationary concerns. Repeated rises in interest rates by the central bank would likely slow economic activity in the People’s Republic of China, which could, in turn, materially increase our costs and also reduce demand for our products.

Any recurrence of severe acute respiratory syndrome, or SARS, or another widespread public health problem, could adversely affect our operations.

A renewed outbreak of SARS or another widespread public health problem in the People’s Republic of China, where much of our revenue is derived, could have an adverse effect on our operations. Our operations may be impacted by a number of health-related factors, including quarantines or closures of some of our offices that would adversely disrupt our operations. Any of the foregoing events or other unforeseen consequences of public health problems could adversely affect our operations.

Our principal assets and management are located outside the United States, which could make it difficult to enforce laws or judgments against us.

Because our principal assets are located outside of the U.S. and all of our directors and officers reside outside of the U.S., it may be difficult for investors to enforce their rights based on U.S. federal securities laws against us and our officers and directors in the U.S. or to enforce a U.S. court judgment against us or them in the People’s Republic of China.

All of our directors and officers reside outside of the U.S. In addition, China Power, Inc. and China Minerals Holdings, Inc., our subsidaries (Nevada Corporations), which have alternative energy projects and mining projects in China, and are located in the People’s Republic of China and substantially all of their assets are located outside of the U.S. It may therefore be difficult or impossible for investors in the U.S. to enforce their legal rights based on the civil liability provisions of the U.S. federal securities laws against us in the courts of either the U.S. or the People’s Republic of China and, even if civil judgments are obtained in U.S. courts, to enforce such judgments in the People’s Republic of China courts. Further, it is unclear if extradition treaties now in effect between the U.S. and the People’s Republic of China would permit effective enforcement against us or our officers and directors of criminal penalties, under the U.S. federal securities laws or otherwise.

We may have difficulty establishing adequate management, legal and financial controls in the People’s Republic of China.

The People’s Republic of China historically has not adopted a western style of management and financial reporting concepts and practices, as well as in modern banking, computer and other control systems. We may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the People’s Republic of China. As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet western standards.

The legal system in China has inherent uncertainties that may limit the legal protections available in the event of any claims or disputes with third parties.

The legal system in China is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since 1979, the central government has promulgated laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. As China’s foreign investment laws and regulations are relatively new and the legal system is still evolving, the interpretation of many laws, regulations and rules is not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit the remedies available in the event of any claims or disputes with third parties. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

Restrictions on currency exchange may limit our ability to receive and use our revenues effectively.

Because a substantial portion of revenues in future periods will be in the form of Renminbi, any future restrictions on currency exchanges may limit our ability to use revenue generated in Renminbi to fund any future business activities outside China or to make dividend or other payments in U.S. dollars. Although the Chinese government introduced regulations in 1996 to allow greater convertibility of the Renminbi for current account transactions, significant restrictions still remain, including primarily the restriction that foreign-invested enterprises may only buy, sell or remit foreign currencies, after providing valid commercial documents, at those banks authorized to conduct foreign exchange business. In addition, conversion of Renminbi for capital account items, including direct investment and loans, is subject to government approval in China, and companies are required to open and maintain separate foreign exchange accounts for capital account items. We cannot be certain that the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the Renminbi, especially with respect to foreign exchange transactions.

We may be unable to enforce our rights due to policies regarding the regulation of foreign investments in China.

China’s legal system is a civil law system based on written statutes in which decided legal cases have little value as precedents, unlike the common law system prevalent in the United States. China does not have a well-developed, consolidated body of laws governing foreign investment enterprises. As a result, the administration of laws and regulations by government agencies may be subject to considerable discretion and variation, and may be subject to influence by external forces unrelated to the legal merits of a particular matter. China's regulations and policies with respect to foreign investments are evolving. Definitive regulations and policies with respect to such matters as the permissible percentage of foreign investment and permissible rates of equity returns have not yet been published. Statements regarding these evolving policies have been conflicting and any such policies, as administered, are likely to be subject to broad interpretation and discretion and to be modified, perhaps on a case-by-case basis. The uncertainties regarding such regulations and policies present risks which may affect our ability to achieve our stated business objectives. If we are unable to enforce any legal rights we may have under our contracts or otherwise, our ability to compete with other companies in our industry could be limited which could result in a loss of revenue in future periods which could impact our ability to continue as a going concern.

Recent regulations relating to acquisitions of Chinese companies by foreign entities may create regulatory uncertainties that could restrict or limit our ability to operate, including our ability to pay dividends.

The State Administration of Foreign Exchange, or SAFE, issued a public notice in January 2005 concerning foreign exchange regulations on mergers and acquisitions in China. The public notice states that if an offshore company controlled by Chinese residents intends to acquire a Chinese company, such acquisition will be subject to strict examination by the relevant foreign exchange authorities. The public notice also states that the approval of the relevant foreign exchange authorities is required for any sale or transfer by the Chinese residents of a Chinese company's assets or equity interests to foreign entities for equity interests or assets of the foreign entities.

In April 2005, SAFE issued another public notice further explaining the January notice. In accordance with the April 2005 notice, if an acquisition of a Chinese company by an offshore company controlled by Chinese residents has been confirmed by a Foreign Investment Enterprise Certificate prior to the promulgation of the January 2005 notice, the Chinese residents must each submit a registration form to the local SAFE branch with respect to their respective ownership interests in the offshore company, and must also file an amendment to such registration if the offshore company experiences material events, such as changes in the share capital, share transfer, mergers and acquisitions, spin-off transaction or use of assets in China to guarantee offshore obligations. The April 2005 notice also provides that failure to comply with the registration procedures set forth therein may result in restrictions on our Chinese resident shareholders and our subsidiaries. Pending the promulgation of detailed implementation rules, the relevant government authorities are reluctant to commence processing any registration or application for approval required under the SAFE notices.

In addition, on August 8, 2006, the Ministry of Commerce ("MOFCOM"), joined by the State-Owned Assets Supervision and Administration Commission of the State Council, State Administration of Taxation, State Administration for Industry and Commerce, China Securities Regulatory Commission and SAFE, amended and released the Provisions for Foreign Investors to Merge and Acquire Domestic Enterprises, new foreign-investment rules which took effect September 8, 2006, superseding much, but not all, of the guidance in the prior SAFE circulars. These new rules significantly revise China's regulatory framework governing onshore-offshore restructurings and how foreign investors can acquire domestic enterprises. These new rules signify greater Chinese government attention to cross-border merger, acquisition and other investment activities, by confirming MOFCOM as a key regulator for issues related to mergers and acquisitions in China and requiring MOFCOM approval of a broad range of merger, acquisition and investment transactions. Further, the new rules establish reporting requirements for acquisition of control by foreigners of companies in key industries, and reinforce the ability of the Chinese government to monitor and prohibit foreign control transactions in key industries.

These new rules may significantly affect the means by which offshore-onshore restructurings are undertaken in China in connection with offshore private equity and venture capital financings, mergers and acquisitions. It is expected that such transactional activity in China in the near future will require significant case-by-case guidance from MOFCOM and other government authorities as appropriate. It is anticipated that application of the new rules will be subject to significant administrative interpretation, and we will need to closely monitor how MOFCOM and other ministries apply the rules to ensure its domestic and offshore activities continue to comply with Chinese law. Given the uncertainties regarding interpretation and application of the new rules, we may need to expend significant time and resources to maintain compliance.

It is uncertain how our business operations or future strategy will be affected by the interpretations and implementation of the SAFE notices and new rules. Our business operations or future strategy could be adversely affected by the SAFE notices and the new rules. For example, we may be subject to more stringent review and approval process with respect to our foreign exchange activities.

Revised tax structure proposed by the National People’s Congress could have a material impact on our performance.

On December 24, 2006, the Chinese government officially submitted a draft of the new Enterprise Income Tax Law which seeks to unify China's dual tax system. Presently China has a dual tax policy with different rates of taxation for domestic enterprises as opposed to foreign investment enterprises. The new unified tax rate is proposed to be 25% for all entities, which is higher than the 15% rate currently applied to foreign investment entities. However low profit enterprises, whether foreign investment enterprises or domestic enterprises, may be subject to a lower tax rate of 20%. It is uncertain how this new policy, if adopted, would impact our subsidiaries, as all the components of the revised policy have not been determined.

Failure to comply with the United States foreign corrupt practices act could subject us to penalties and other adverse consequences.

We are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from time-to-time in China. We can make no assurance, however, that our employees or other agents will not engage in such conduct for which we might be held responsible. If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Common Stock

There is a limited public market for our common stock. Failure to develop or maintain a trading market could negatively affect the value of our shares and make it difficult or impossible for shareholders to sell their shares.

On April 18, 2005, our common stock was approved for quotation on the OTC Bulletin Board under the symbol "CHHH." In May 2007 our trading symbol was changed to CHHL. To date there has been a limited trading market in our common stock on the OTC Bulletin Board. Failure to develop or maintain an active trading market could negatively affect the value of our shares and make it difficult for our shareholders to sell their shares or recover any part of their investment in us. The market price of our common stock may be highly volatile. In addition to the uncertainties relating to our future operating performance and the profitability of our operations, factors such as variations in our interim financial results, or various, as yet unpredictable factors, many of which are beyond our control, may have a negative effect on the market price of our common stock.

The majority of our outstanding shares are controlled by our Chief Executive Officer and Chairman.

Our Chief Executive Officer and Chairman, Julianna Lu, beneficially owns the majority of our outstanding shares of common stock and all of our outstanding shares or preferred stock. Accordingly, Ms. Lu controls the voting of our stock and has the ability to control the approval of most corporate actions, including increasing our authorized capital stock and the dissolution, merger or sale of our assets or business. Other stockholders will have limited or no ability to influence the outcome of stockholder votes on these or other matters.

Our common stock is subject to the "penny stock" rules of the sec and the trading market in our securities is limited, which makes transactions in our common stock cumbersome and may reduce the value of an investment in our stock.

The SEC has adopted Rule 3a51-1 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires:

that a broker or dealer approve a person's account for transactions in penny stocks; and

the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

obtain financial information and investment experience objectives of the person; and

make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:

sets forth the basis on which the broker or dealer made the suitability determination; and

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

We have not voluntarily implemented various corporate governance measures, in the absence of which, stockholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.

Recent Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or the Nasdaq Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges are those that address board of directors' independence, audit committee oversight, and the adoption of a code of ethics. Although we have adopted a Code of Ethics, we have not yet adopted any of these other corporate governance measures and, since our securities are not yet listed on a national securities exchange, we are not required to do so. We have not adopted corporate governance measures such as an audit or other independent committees of our board of directors as we presently do not have any independent directors. If we expand our board membership in future periods to include additional independent directors, we may seek to establish an audit and other committees of our board of directors. It is possible that if we were to adopt some or all of these corporate governance measures, stockholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. For example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officers and recommendations for director nominees may be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.

Provisions of our certificate of incorporation and bylaws may delay or prevent a takeover which may not be in the best interests of our stockholders.

Provisions of our certificate of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions of Nevada law also may be deemed to have certain anti-takeover effects which include that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation's disinterested stockholders.

In addition, our certificate of incorporation authorizes the issuance of up to 20,000,000 shares of preferred stock with such rights and preferences as may be determined by our board of directors. Our board of directors may, without stockholder approval, issue preferred stock with dividends, liquidation, conversion or voting rights that could adversely affect the voting power or other rights of our common stockholders.

ITEM 3.

CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our principal executive and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our principal executive and principal financial officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

(b) Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(c) Inherent Limitations on Effectiveness of Controls. Our management, including our principal executive and financial officer, does not expect that our disclosure controls and procedures or our internal control will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries' officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS SECURITIES

During the quarter during the year ended September 30, 2008, the Company issued 717,940 shares of common stock for the company’s office rent rendered at an aggregate market value of $0.0112 per share for a total value of $8,041.

The offer and sale of such shares of our common stock were effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act and in Section 4(2) of the Securities Act. A legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

There were no defaults upon senior securities during the period ended September 30, 2008.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to the vote of securities holders during the period ended September 30, 2008.

ITEM 5. OTHER INFORMATION

On February 22, 2008 we amended our Certificate of Incorporation to increase the number of authorized shares of common stock from 300,000,000 to 2,000,000,000.

ITEM 6. EXHIBITS

Exhibit Number		Description
3.01		Articles of Incorporation of the AE&E Pharma Corporation (Incorporated by reference to the Company’s registration statement on Form SB-2 (File No. 333-119034), filed with the Securities and Exchange Commission on September 16, 2004).

3.02		Certificate of Amendment to Articles of Incorporation, changing name to China Health Holding, Inc. (Incorporated by reference to the Company’s registration statement on Form SB-2 (File No. 333-119034), filed with the Securities and Exchange Commission on September 16, 2004).

3.03		Certificate of Amendment to Articles of Incorporation increasing the Company’s authorized shares of common stock (Incorporated by reference to the Company’s 10-QSB filed with the Securities and Exchange Commission on May 12, 2005).

3.04		Bylaws (Incorporated by reference to the Company’s registration statement on Form SB-2 (File No. 333-119034), filed with the Securities and Exchange Commission on September 16, 2004).

3.05		Certificate of Designation, Powers, Preferences and Rights of Series A Preferred Stock, filed with the State of Nevada on February 21, 2006. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 28, 2006).

3.06		Amendment to Certificate of Designation, Powers, Preferences and Rights of Series A Preferred Stock, filed with the State of Nevada on June 19, 2006.

3.07		Certificate of Amendment to Articles of Incorporation increasing the Company’s authorized shares of common stock to 2,000,000,000, filed with the State of Nevada on February 22, 2008. (filed herewith).

31.1		Certification by Chief Executive Officer/Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification by Chief Executive Officer/Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	China Holdings, Inc.

Dated: November 10, 2008	By:	/s/ Julianna Lu
		Julianna Lu
		Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, Treasurer and Chairman of the Board of Directors

EXHIBIT INDEX

Exhibit Number		Description
3.01		Articles of Incorporation of the AE&E Pharma Corporation (Incorporated by reference to the Company’s registration statement on Form SB-2 (File No. 333-119034), filed with the Securities and Exchange Commission on September 16, 2004).

3.02		Certificate of Amendment to Articles of Incorporation, changing name to China Health Holding, Inc. (Incorporated by reference to the Company’s registration statement on Form SB-2 (File No. 333-119034), filed with the Securities and Exchange Commission on September 16, 2004).

3.03		Certificate of Amendment to Articles of Incorporation increasing the Company’s authorized shares of common stock (Incorporated by reference to the Company’s 10-QSB filed with the Securities and Exchange Commission on May 12, 2005).

3.04		Bylaws (Incorporated by reference to the Company’s registration statement on Form SB-2 (File No. 333-119034), filed with the Securities and Exchange Commission on September 16, 2004).

3.05		Certificate of Designation, Powers, Preferences and Rights of Series A Preferred Stock, filed with the State of Nevada on February 21, 2006. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 28, 2006).

3.06		Amendment to Certificate of Designation, Powers, Preferences and Rights of Series A Preferred Stock, filed with the State of Nevada on June 19, 2006.

3.07		Certificate of Amendment to Articles of Incorporation increasing the Company’s authorized shares of common stock to 2,000,000,000, filed with the State of Nevada on February 22, 2008. (filed herewith).

31.1		Certification by Chief Executive Officer/Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification by Chief Executive Officer/Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.